Wrapped Bitcoin (WBTC)
Wrapped Bitcoin or WBTC is an ERC-20 token representing the Bitcoin cryptocurrency on the Ethereum blockchain. This modified version of the leading cryptocurrency wraps or tokenizes Bitcoin for use within the Ethereum ecosystem.
The WBTC token can then be used across decentralized finance (DeFi) applications on the blockchain, which cannot access native Bitcoin (BTC) within the network. In recent years, as DeFi has evolved beyond Ethereum to other blockchain networks, the WBTC asset has also expanded to function on different blockchain networks’ DeFi platforms.
The Wrapped Bitcoin price matches the native Bitcoin price, using smart contracts to maintain the 1:1 peg to BTC. The WBTC token offers liquidity and access to Bitcoin as a digital asset that can be traded on decentralized exchanges and platforms. This feature is essential as DeFi-based applications lack access to liquidity across blockchains, unlike their centralized counterparts.
The ERC-20 WBTC token leverages centralized custodian BitGo’s services for the integration. BitGo launched the project in partnership with Kyber Network and Ren in January 2019.
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